Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:

Spend, spend, spend, while pretending that you love markets.


In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Mar 30th, 2007 at 05:32:13 AM EST
The source: http://economist.com/world/britain/displaystory.cfm?story_id=E1_RRJNRDV

And more from today's edition:

A surprise rise in child poverty casts the government's strategy into doubt


TONY BLAIR'S most famous pronouncements on wealth aim at opposite ends of the income distribution. The prime minister once declared that Labour would abolish child poverty within a generation. He also said he had no burning ambition to make sure that David Beckham, a commodity with a sideline in football, earns any less.

In putting these two thoughts together, Mr Blair was sticking to a consensus that has held for the past 20 years. Broadly, this says that the rich can get as rich as they like, so long as the poor are getting better-off too.

However, new figures out this week suggest that the bargain isn't working. The number of poor children, as defined by the government, has grown by 100,000 in the past year. Furthermore, overall income inequality has grown too (see chart), despite hefty redistribution under Gordon Brown, the chancellor of the exchequer.


Not taxing the rich has only one result: the rich are richer. Maybe that's a legitimate goal, but it should be clear that it's the only result. Prosperity for others is not included.


In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Mar 30th, 2007 at 06:52:47 AM EST
[ Parent ]
As you know, I tend to give Brown some credit on that, though.  He may have kept GDP in the black with all that spending, and God knows a few cities outside of the South could use it.  But he does need to get his act together.  If Labour can get Britain out of Iraq and hold spending lower than GDP growth, he'll close the gap fairly soon.  The deficit is less than 3% of GDP, -- and, more importantly, I believe it is now lower than the GDP growth rate -- so I don't think it should be a terrible concern.  Work needed?  Yes.  Something to flip out over?  No.

The rise in the Gini coefficient puzzles me, though.  The minimum wage has been rising strongly -- now higher, in pounds, than its American counterpart (at the federal level) stands in dollars.  And everything I've read shows real wages have been rising at reasonably strong rates, somewhere in the neighborhood of 2-3% each year, although probably slower now with higher inflation and more slack in the labor market.

You can, after all, have more inequality while also having gains to the working and middle classes.  The concern is the American case for most of the last five or six years, in which the rich get richer while the working class and a good chunk of the middle class see no real gains in wages.  The differences in healthcare-related concerns, as I noted the other day, shouldn't be neglected either.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri Mar 30th, 2007 at 09:50:46 AM EST
[ Parent ]

And everything I've read shows real wages have been rising at reasonably strong rates, somewhere in the neighborhood of 2-3% each year, although probably slower now with higher inflation and more slack in the labor market.

The problem is that in the UK a lot of people do not work full time - in fact, it is one of the countries with the lowest average working hours (I had a nice graph showing this but cannot seem to find it). so if wages increase but the number of hours per worker go down, it does not help.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Mar 30th, 2007 at 10:24:17 AM EST
[ Parent ]

Display:

Occasional Series